Gold hardly changed as traders await US nonfarm payrolls

Bengaluru — Gold prices held steady on Wednesday as investors braced for a monthly US payrolls report that could influence how swiftly and deeply the Federal Reserve cuts interest rates in 2024.

Spot gold held its ground at $2,495.00/oz by 4.36am GMT. US gold futures rose 0.1% to $2,526.40.

Before the nonfarm payrolls report on Friday, job openings data on Wednesday and the ADP employment and jobless claims reports on Thursday will be in focus.

Traders see a 41% chance of a 50 basis point (bp) rate cut on September 18 and a 59% chance of a 25bp reduction, according to the CME Group’s FedWatch Tool.

“If the jobs data is weak, it will increase the probability of a 50bp cut and raise worries about growth slowdown, which will be supportive for gold,” said Kyle Rodda, a financial market analyst at Capital.com.

“But from a technical viewpoint, positioning is a bit too long for gold and this might limit upside,” said Rodda, adding that prices were likely to scale new highs in the longer run, even if there was a pullback in the short-term because of positioning.

Data on Tuesday showed that US manufacturing contracted at a moderate pace in August amid some improvement in employment.

Bullion is considered a safe asset during political and economic uncertainty and tends to thrive in a low rate environment.

So far in 2024, gold has gained 21%, hitting a record high of $2,531.60 on August 20.

Spot silver fell 0.1% to $28.02/oz. Platinum gained 0.2% to $905.39 and palladium rose 0.3% to $941.06. The two metals are primarily used in engine exhausts to reduce emissions.

“In Germany, consumers turning away from BEVs [battery electric vehicles] has resulted in about 50,000 additional sales of catalysed vehicles, which will help to improve palladium demand in the short term,” analysts at Heraeus said in a note.

Reuters